Investec, which has committed to end funding for coal, oil and gas, as well as thermal coal projects, in the next 12 years, is set to ask shareholders to remove a “bonus cap” on executive remuneration after paying CEO Fani Titi up to R175 million for the year to the end of March.
Investec’s directors are remunerated in pound and as per the annual report released on Friday,
Titi’s remuneration increased from £4.3m to £7.5m. This makes him the highest paid CEO for a South African financial services company.
The higher remuneration for Titi followed on the company’s stronger revenue outturn and profitability after it “successfully navigated a complex macro-economic” backdrop.
Investec reported a 21.6% growth in adjusted operating profit which amounted to £835.9m, yielding a 13.7% rise in return on equity.
“The strong revenue performance was supported by continued client acquisition, resulting in higher average advances, rising interest rates and increased client activity. Fee and commission income in our wealth and investment businesses was negatively impacted by the effects of the market sell off on average funds under management,” said Henrietta Baldock, the chairperson for the Investec remuneration committee.
The company is set to seek shareholders’ approval for a new directors’ remuneration policy at its 2024 annual general meeting. This includes the removal of a “bonus cap” on directors’ remuneration.
Investec will also seek shareholders’ approval to continue consideration for and provision of “initiatives to support our employees”, including measures aimed at “mitigating cost-of-living” challenges. This comes as the South African and global economies have continued to face elevated inflation, interest rate hikes and wider economic challenges.
The financial services company yielded a £780m return to shareholders, comprising ordinary dividends, net value derived from a share buy-back scheme and the repurchase and distribution of the 15% shareholding in Ninety One
“The remuneration committee believes that the executive directors have performed very well and the remuneration outcomes are reflective of the overall financial and non-financial performance for the one and three-year periods, and are also aligned to the experience of our shareholders and employees,” added Baldock.
The executive directors have also put the company on a path to ending funding for fossil fuel projects over 12 years.
In its sustainability report for 2023, the company has committed to “zero coal in our loan book by 31 March 2027 in Investec”, for its UK division.
Investec will also end thermal coal funding by its South Africa division by March 2030. It was also committed to “stopping all limited recourse project financing to new thermal coal mines, regardless of jurisdiction”, starting this year.
In terms of oil and gas funding, Investec said it would not bankroll extraction, exploration, or production for such commodities from 2035.
“With the world facing huge and increasing climate-related threats, we’re committed to enabling a fair, efficient and inclusive energy transition. We are bolstering efforts to accelerate climate-related financing by providing a long-term senior credit facility of $80m that aims to expand the Transforming Financial Systems for Climate programme in South Africa.” the company said in its annual report.
It also joined the Partnership for Biodiversity Accounting Financials and “maintained carbon neutrality” direct operational emissions for the fifth financial year as part of its commitment to containing carbon emissions.
BUSINESS REPORT